JOHNSON ASSOCIATES FINANCIAL SERVICES COMPENSATION Second Quarter Trends and Year-End Projections 8/3/18

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1 JOHNSON ASSOCIATES FINANCIAL SERVICES COMPENSATION Second Quarter Trends and Year-End Projections 8/3/18 After the second quarter, Johnson Associates projects broad increases in incentive compensation across financial services. Incentive compensation for asset management is expected to be up moderately. Major investment & commercial banking firms saw substantial growth in trading and equity underwriting. Headcount changes reflect technology investment and cost cutting. Headcount increases linked to selective hiring by business line as opposed to broad based employee growth. Geopolitical uncertainty and market volatility are key 2018 incentive wildcards. Traditional Asset Management: Strong top line growth at major firms Incentives trending upward but momentum slowing Stable flows in largest firms with lowest fees, outflow problems for ancillary competitors Margins fall as low-fee products dominate the space Passive and ETF investments receive most of industry inflows Alternatives: Hedge fund asset growth continues record run Hedge fund incentives up modestly, record capital for eight consecutive quarters Equity Hedge inflows offset by Macro outflows Private equity incentives up on healthy results with emphasis on Credit and Real Estate funds Private equity buyout fundraising continuing Investment and Commercial Banking: Banks continue upward ascent Trading and equity underwriting drive results. Political and regulatory tone aids healthy business pipeline for second half of year Investment banking performance down slightly with advisory weighing down results Equities trading incentives up significantly due to increased volatility and client activity; strong performance building on healthy first quarter. Fixed income trading gaining momentum Stable and healthy performance in Wealth and Investment Management offsets volatility elsewhere 19 West 44 th Street, Suite 511, New York, New York (212) Fax (212)

2 Projected 2018 Incentive Funding Headcount-adjusted basis Traditional Asset Management & Alternatives Investment & Commercial Banking Business/Area % Change from 2017 Business/Area % Change from 2017 Asset Management (Independent and Captive) 5% to 10% Firm Management/Staff Positions 5% to 10% Flows up modestly but wavering. Market appreciation drives AUM while fees continue to drop gradually Generally moves in line with entire firm. Priority on driving down costs to improve margins Hedge Funds (Independent and Captive) 0% to 5% Investment Banking Advisory Underwriting -5% to -10% 0% to 5% Assets eclipse record level for eighth consecutive quarter. Performance generally in line with market Strongest results in equity underwriting; advisory down modestly. Wide variability in performance Private Equity 5% to 10%* Sales & Trading Equities Fixed Income 15% to 20% 5% to 10% Strong performance across industry. Large focus on credit and real estate. European fund raising gaining momentum Healthy client activity and active global markets buoy results High Net Worth 5% Retail & Commercial Banking 5% Stable assets and higher fee revenue Commercial lending aided by rising rates, deposit growth continues *Applies to incentive and equity, excluding carry 2 JOHNSON ASSOCIATES, INC.

3 Incentive Trend Incentives expected to be up across sectors, hedge funds trending up slightly while private equity, asset management, and investment and commercial banks see stronger improvements *Note: Updated display (previously showed incentive change since 2009) 3 JOHNSON ASSOCIATES, INC.

4 Projected % Change in Year-End Incentive Pool by Firm* 4 JOHNSON ASSOCIATES, INC.

5 Percent Change in Assets Under Management Data represents median percentage change in average assets under management for six months 2018 compared to average full year 2017, for traditional long only (5 select firms) and alternatives (7 select firms) 5 JOHNSON ASSOCIATES, INC.

6 Year-to-Date Compensation & Benefits Ratios 6M 2017 v. 6M 2018 results; year-over-year comparisons may be skewed by partial year compensation and financial results Compensation & Benefits as % of Net Revenue Compensation & Benefits as % of Pre-Tax Pre-Comp Net Income 6 JOHNSON ASSOCIATES, INC.

7 Analyst Estimated EPS Trend With 7 months into the fiscal year, analyst estimates reflect steady outlook for both asset management and investment and commercial banks Chart reflects a sample of 6 investment and commercial banks and 9 asset management and related services firms 2018 EPS Estimate Trend 7 JOHNSON ASSOCIATES, INC.